Milei Makes His ‘First Mistake’ On Bitcoin

Argentina’s government, led by the anarcho-capitalist and libertarian President Javier Milei, has introduced a new regulation that mandates a compulsory Registry of Virtual Asset Service Providers. This decision, announced in late March by the Comisión Nacional de Valores (CNV), contradicts the initially perceived pro-Bitcoin stance of Milei’s administration and has sparked a wave of criticism and concern among crypto enthusiasts and investors within and beyond Argentina’s borders.

Milei Make First Mistake On Bitcoin

According to Forbes, the CNV’s new requirement compels companies and individuals involved in various crypto-related services—including buying, selling, sending, receiving, lending, or trading—to complete a registration process.

This policy, approved by the Argentine senate on March 14, extends its reach not only to locally based businesses but also to those operating within the country from abroad. CNV President Roberto E. Silva starkly warned, “Those who are not registered will not be able to operate in the country,” underlining the government’s commitment to this regulation.

Critics argue that this move represents a significant backtrack from the economic freedoms promised by Milei, who took office in December 2023 with a vision to rebuild and dollarize the national economy, potentially boosting Bitcoin and cryptocurrency adoption in Argentina. Manuel Ferrari, a member of an Argentinian NGO and co-founder of the Money On Chain protocol, voiced his discontent in an interview, stating, “It’s a terrible idea to have a registry that enables the buying and selling Bitcoin. Bitcoin is money, not a security.”

Ferrari’s remarks echo a broader sentiment that this regulation is not only unnecessary but detrimental, benefiting “state bureaucrats and an army of lawyers and useless people from the ‘compliance industry’” while diverging from Milei’s supposed libertarian principles.

Nicolas Bourbon, co-founder of the KamiPay payments solution, offered a nuanced perspective, suggesting that while Milei might not explicitly support Bitcoin, he respects currency freedom and the regulation is not aimed at users but rather at satisfying international institutions’ demands.

The regulation has not only faced domestic backlash but also international criticism. Bitcoin maximalist Max Keiser expressed his disappointment via X (formerly Twitter), accusing Milei of failing to comprehend Bitcoin’s essence and predicting negative repercussions. “Javier Milei makes his first major mistake. He never took the time to understand Bitcoin, now he’ll suffer the consequences,” he stated.

Similarly, an Argentine Bitcoin user, known as Neo (@21Millones_BTC), lamented the practical implications of the new policy, revealing that custodial apps like Bela and Strike have already restricted Bitcoin transfers, a move that contradicts the ethos of freedom associated with cryptocurrencies.

“Milei turned out to be a fluke, fake weak libertarian after all. I used to pay contractors in Argentina in Bitcoin via Lightning until a few months ago. Now since this new “libertarian” government is in office, all custodial apps ceased to allow transfers using BTC, including Belo, Strike and many others. So much about FREEDOM. Don’t trust politicians, kill all your f**ing heroes,” he remarked.

Argentina ranks 15th in the Chainalysis’ Global Crypto Adoption Index Top 20, highlighting its significance in the global cryptocurrency market. The introduction of this regulatory framework marks a critical juncture for the country’s crypto landscape, with future implications that remain uncertain. While the CNV’s initiative aims to align with the Financial Action Task Force’s recommendations, the immediate reaction from the crypto community suggests a disconnect between the government’s actions and the libertarian values purportedly endorsed by President Milei.

At press time, BTC traded at $66,964.

Featured image from Bloomberg, chart from TradingView.com